Technical outlook:
EURUSD dropped to the parity level of 1.0000 intraday on Tuesday, as bears continue to remain in control. The single currency pair has hit a major Fibonacci extension at around 1.10025 and is expected to react. The entire trade cycle that started from 1.2350 on January 06, 2022, has potentially terminated close to the 1.0000 level as bulls might be inclined to come back strong from the current levels.
EURUSD has remained in control of bears for the last 18 months as they complete a larger-degree downswing between 1.2350 and 1.0000. The potential remains for a meaningful rally from the current levels towards 1.0900 at least, which is the Fibonacci 0.382 retracement of the entire drop. We have marked it as a rectangle on the daily chart here, which is also close to resistance at around 1.0920-30 area.
EURUSD bulls are looking to come back in control as they are pulling back prices quickly towards 1.0040 at this point in writing. Price resistance on the daily chart is seen through 1.0615 and bulls would be inclined to break higher and tighten their grip. The 1-hour chart resistance is seen at around 1.0190 and a break there will be the first sign of a potential bullish reversal.
Going forward:
EURUSD has completed a meaningful larger-degree wave potentially at around 1.0000. Prices have rapidly pulled back towards 1.0060 now as bulls remain inclined to come back in control. The daily chart is also carving a potential pinbar/hammer candlestick pattern. If successful, prices would begin a bullish reversal soon.
Trading plan:
Potential rally expected towards 1.0900 against 0.9900
Good luck!
